ALTERATION OF SHARE CAPITAL
Any changes made in the existing share capital structure of the firm, it is known as Alteration in Share Capital. It is important to ensure that the Articles of Association (AoA) must authorize for the Alteration in Share Capital Clause.
Section 61 of the Companies Act, 2013 provides that a limited company having a share capital may, by passing an ordinary resolution in a general meeting, alter the capital clause of its memorandum; provided authority to alter is given to it by articles of association.
A notice of alteration is required to be filed with the ROC in Form SH-7 within 30 days.
Section 61(1) of the Companies Act, 2013 provides that Capital Clause in Memorandum of Association (MOA) can be altered in any of the following ways:
- By increasing its authorised share capital by such amount as the company requires;
- By consolidating existing shares into shares of larger denomination;
- By converting fully-paid shares into stock or vice-versa;
- By sub-dividing its existing shares into shares of smaller denomination; and
- By cancelling shares which have not been taken up or agreed to be taken up and diminishing the amount of its share capital by the amount of the shares cancelled.
LEGALDUX CORPORATE SERVICES’s professionals have in-depth knowledge and experience and have been extending comprehensive and expert legal support and services for alteration of share capital clause for various companies.
